What I found striking in a story today was this note about airline tickets.
- The cost of fuel is prompting some businesses to increase prices. Airlines have raised fares seven times since Sept. 1, and all five of the biggest U.S. carriers last week added a $10 round-trip fuel surcharge to ticket prices. Today's report showed airfares jumped 1.6 percent in October.
- ``Since fuel prices affect airlines across the board, consumers should expect prices to continue to increase,'' Rick Seaney, chief executive officer of Dallas-based FareCompare.com, said in an e-mailed statement Nov. 9.
Other somewhat understated 'facts' from the report this time around
- Prices were 3.5 percent higher than a year earlier, the biggest 12-month increase since August 2006. Compared with 12 months ago, ``prices are uncomfortably high for the Fed,'' said Mark Vitner, a senior economist at Wachovia Corp. in Charlotte, North Carolina. ``It has to raise the question about the limits of how much the Fed will cut rates.'' (no question for me, they continue to cut until the financial system is 'saved')
- Food prices, which account for about a fifth of the CPI, increased 0.3 percent after a 0.5 percent increase in September. (right... somehow this is very different than what companies that actually produce food tell us... milk, eggs, poultry, beef, grains, wheats)
- Almost 60 percent of the CPI covers prices that consumers pay for services ranging from airline fares to movie tickets and laundry charges.
- Wal-Mart Stores Inc. marked down 15,000 holiday items, 20 percent more than last year, and started discounting toys in the beginning of October, more than two weeks earlier than in 2006. The strategy was aimed at taking customers away from Target Corp. and Kroger Co. as Americans grapple with the housing slump and high-cost fuel.
Anyhow back on strike.... the only inflation numbers I care about are what the companies are telling us...
3 comments:
Agreed Mark. And health care costs aren't exactly "contained" either, sad to say.
Here are some interesting inflation-related articles I've seen recently:
Fed Plans to Increase Forecasts to Once a Quarter: Central bankers will also add predictions for a price gauge that includes food and energy costs and give a ``fuller discussion'' of members' projections...Fed officials will scrap projections of nominal gross domestic product, which is unadjusted for inflation. The nominal GDP forecasts ``now seem relatively less useful to the public'' given the addition of headline-inflation forecasts... Bernanke and several other Fed officials have said their ``comfort zone'' for that inflation gauge is 1 percent to 2 percent. The index rose 1.8 percent in September from a year before, the fourth straight month below 2 percent.
In Bernanke's congressional testimony last week, he said that the FOMC ``projected overall and core inflation to be in a range consistent with price stability next year.''
Inflation: China's least wanted export: When inflation starts to kill people then it is a serious problem. Three people died and 31 were injured on Saturday in a stampede to buy cut-price cooking oil in the western Chinese city of Chongqing. China can no longer explain away inflation as a short-term result of floods and epidemics of animal disease - nor can it ignore the strains its macroeconomic policies are producing.
@ rob - if you click on the inflation label on the post you will see me go off on health care as well. Inflation is everywhere execpt in things like electronic goods (and now houses) but people have long term contracts (with houses) so they are stuck paying 2003-2006 values, even as the house falls so it does not help much. We have a lot of major issues and I try not to get into political or societal issues much, but suffice to say even Buffet was saying we are going the wrong direction yesterday in his estate tax commentary... we are turning into a plutoricity (however you spell it) I think the first half of the decade it was happening slower and middle class was using home to spend as they used to, (over their head), now it more out of need and they dont have that buffer anymore. So it could be ugly.
@msb - wow that 2nd article - EYE OPENING. I thought China was a safe haven?? Russia too! :) Just like Google was about $120 higher. When you constrain market forces (think our Fed), strains occur, and eventually bad things happen. And their financial system is nowhere near as 'developed' err (able to create new instruments to keep pushing off risk) as ours.
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